“That matter is closed now,” a government official briefed on the development said. “The board of Air India does not want to sell the tower,” he said. Asking not to be named because he is not authorised to speak to the media,. the official did not attribute any reason...
to the board’s change of stance.
The tower built in 1974, was designed by John Burgee of New York-based firm Johnson and Burgee. It was the corporate head quarters of Air India until 2013 when it shifted base to New Delhi following a 2007 merger with Indian Airlines, another State-owned company that operated on domestic routes.
The move to sell the 2.2 l sq ft building to cash-rich and India’s busiest container port was mooted a few days after a plan to privatise the carrier fell through for lack of bidder interest.
The idea behind the move was to give a much-needed liquidity boost to Air India while ensuring that the iconic building remained with the government.
Air India’s decision to backtrack from its earlier plan to sell the Mumbai tower is reflected in the list of assets identified for hiving off during strategic disinvestment (read privatisation) by the Department of Investment and Public Asset Management (DIPAM), the asset sale department of the Central government, on its website.
The Air India Tower does not figure in the list, though, it includes the Airlines House, the current headquarters of the carrier, in New Delhi.
Aviation industry watchers see this as an indication of the airline moving its headquarters back to Mumbai in future.
Earlier reports said that Air India might sell its former head office in Mumbai for an estimated Rs 2,000 crore by the end of March to state-run Jawaharlal Nehru Port Trust (JNPT). Both JNPT and Air India were reportedly carried out their individual valuations of the iconic Air India building at Mumbai’s Nariman Point
Air India has a net debt of ₹ 55,000 crore, including ₹ 21,000-22,000 crore of aircraft debt.
Earlier, Air India has recommended to the government that its low-cost subsidiary and ground-handling unit be sold to improve the national carrier’s financial position in what could be aprecursor to its eventual divestment.
This follows a failed plan to sell the debt-laden, state-owned airline earlier this year. The report suggests that Air India Express and Air India-SATS, which were previously meant to be sold with Air India, be put up for sale along with the engineering division and another ground-handling business, said a senior aviation ministry official.
The government had sought to sell both units along with a 76 per cent stake in Air India in May. While AI Express is fully owned by Air India, the national carrier owns 50 per cent in AI-SATS and the rest is held by Singapore Airport Terminal Services (SATS).